XPO Surpasses First Quarter Expectations with Strong Financial Performance

XPO Logistics outperformed market expectations in the first quarter of 2024, announcing its financial results on Friday before the market opened. The company reported an impressive, adjusted earnings per share (EPS) of 81 cents, surpassing the consensus estimate by 14 cents and marking a 25-cent increase from the previous year. These figures were adjusted to exclude 25 cents per share in transaction and restructuring costs.

CEO Mario Harik expressed satisfaction with the quarter’s results, stating, “Our robust first quarter financial performance has set a positive tone for the year ahead.”

In the less-than-truckload (LTL) sector, XPO saw a 9% year-over-year increase in revenue, reaching $1.22 billion. This growth was driven by a 3% rise in daily tonnage and a 7% increase in revenue per hundredweight—10% higher when excluding fuel surcharges. This was attributed to a 5% rise in daily shipments, although partially offset by a 2% drop in the weight per shipment.

From the fourth quarter, tonnage rose by 2%, while yield slightly fell by 1% excluding fuel impacts. The LTL unit demonstrated a notable improvement in efficiency, recording an adjusted operating ratio of 85.7%, which is 390 basis points better year-over-year and an 80 basis point improvement from the previous quarter. This change represents a 120 basis point improvement over the typical quarterly change.

A significant reduction in purchased transportation expenses, which decreased by 250 basis points as a percentage of revenue, reflects XPO’s successful strategy of reducing outsourced linehaul miles. The LTL segment achieved $255 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a 40% increase year-over-year.

XPO’s European transportation operations also experienced growth, with a slight 1% increase in revenue to $797 million and a slight improvement in the adjusted EBITDA margin to 4.8%, up 10 basis points from the previous year.

Overall, the company’s consolidated adjusted EBITDA surged by 37% year-over-year to $288 million. Following these announcements, XPO shares saw an 8.3% rise in premarket trading.